If you’re thinking of starting a roofing company, you’ll need to get a few things in order, from a roofing license to insurance
With over 140 million homes in the United States, roofers are always in demand. The roofing industry has reported double-digit growth over the last few years and that trend is set to continue. There's never been a better time to start a roofing company. Here’s what it takes.
Get the Paperwork in Order
Roofing companies must comply with local, state, and federal licensing, business, and tax laws. Your local chamber of commerce or small business association can tell you what's required in your area. Here are a few must-haves for new business owners.
Most states require roofing contractors to be licensed. State contractor boards will issue your license for a fee after you pass an exam.
Licensing fees vary by state, but generally range from $100 to $500. While not all states require licenses, you may still need to register at the city or county level to conduct business.
First, pick a great name people will remember. You can pick a name based on a feature of your area to let customers know you’re a local business. You can also use your own name to emphasize that you’re a local and/or family business. You should try to avoid overly “catchy” names that might make customers take you less seriously.
Next, register your roofing business by filing as a sole proprietorship, limited liability company (LLC), or S corporation. This is a fairly easy process you can do through an online legal service or a local law firm.
Sole proprietorships are the default, and you don’t need to do anything extra to set one up. LLCs and S corps keep your personal assets separate from the business and provide some tax advantages.
The filing fee to form an LLC varies by state and can range from $40 to $500. The cost to form an S corp also varies by state, typically from $800 to $1000. Attorneys and online filing services will charge their own fees, so shop around to find the best deal. You’ll need to decide if a sole proprietorship, LLC, or S corp is right for you.
Finally, register your new business with the IRS to receive your Employer Identification Number (EIN). You’ll need this to open a bank account for your business, purchase insurance, and pay taxes, employees, and workers’ compensation.
It’s important to get insurance before you accept jobs.
Here’s a checklist of the insurances you’ll need:
General liability insurance
Subcontractor liability insurance
Commercial vehicle insurance
Look for an insurance company that offers “all-in-one” coverage for contractors, like The Hartford, Nationwide, or Next Insurance.
Invest in Supplies
Supplies and equipment will be your highest costs as you get started. Make sure you have everything you'll need on hand, so you're ready to provide estimates and get to work right away.
Among the many things you’ll need are:
Safety harnesses and equipment
Roofing materials you want to offer your customers
Keep Overhead Low
Big dreams grow to scale. Keep labor, materials, and bookkeeping costs down as you get started. Try to buy only as much as you need, so your first batch of supplies pays for the next.
Business expenses are tax-deductible. Keep all your records so you can take advantage of tax write-offs. Good recordkeeping will also protect you if a customer disputes your work. Acculynx and JobNimbus are two popular choices among roofing contractors.
Don't Purchase or Rent Office Space Until It's Justified
Don't commit to commercial rent or real estate until your business is large enough that you need an office or place to park trucks beyond your home.
Ease in by Offering Repairs
If you're still budgeting for equipment, focus on roof inspections, repairs, and shingle replacements. These are often one-person jobs that don't need expensive tools or extra hands. Small jobs well done will help you build a reputation and get referrals.
Open a Separate Bank Account for Your Business
A business bank account allows you to receive checks, deposit payments, and pay employees without creating tax confusion. It's important not to get your business and personal finances mixed up. Most business accounts also provide lines of credit.
Take Advantage of Section 179
Section 179 lets small businesses deduct up to $1 million in eligible equipment purchases from their taxable income the following year. If you finance equipment purchases, you can deduct the interest payment from your tax bill.
Focus on Marketing With Positive ROI
Owning a roofing company makes you a salesperson by default. That means a portion of your job involves finding and tracking potential customers. However, you don't want to spend hours cold calling when you should be out working.
While you probably want to get the word out about your new company, spending lots of money on online ads or direct mailers could leave you in debt even before you book your first job.
It's a common mistake to launch big marketing efforts that target everyone when only a small number of "eyes" are actually leads looking for roofing services. Try to only spend marketing dollars in spots visible to your target audience. Target areas and demographics in Google and Facebook Ads to make the most of your marketing investment.
In order for online marketing to pay off, you’ll need to have a presence on Facebook and Instagram and post regular updates. You can post videos on how to check for roof damage, comparisons of different roofing types and materials, and before and after pictures of successful projects.
For new roofing companies, good leads build momentum. Use Angi to get access to qualified leads from interested homeowners in your area.
Do I Need My Own Company to Become a Roofer?
Not at all. You can learn the ropes of the industry by working for roofing companies in your area. Demand for roofers is very high, with about 40,000 open jobs. The lack of workers is a major issue in the industry, something you should keep in mind if you decide to start your own company.
You don’t need a formal education to become a roofer, but apprenticeships are common. Most companies post job openings for roofers on popular job websites, and there are plenty to be had.
Sign Up for Angi to Get Qualified Leads
The most challenging part of starting a roofing company is finding warm leads. Angi provides service professionals with leads who are ready to hire. Join Angi today to help get your roofing company off the ground.